Adding solar to your home can raise its resale value — but in most states, it won’t raise your property tax bill. Here’s why, and what to look out for.
Why Solar Can Increase Home Value
Homes with solar systems tend to sell for more than comparable homes without them. Buyers are drawn to the promise of lower electricity bills, protection from rising utility rates, and the clean energy lifestyle that solar represents.
A widely cited study from Lawrence Berkeley National Laboratory found that solar homes regularly fetch a premium at resale — often several thousand dollars above comparable non-solar homes. So if solar increases your home’s market value, shouldn’t it also increase your property taxes?
In most cases, no — and the reason comes down to a policy tool specifically designed to remove that barrier.
How Solar Property Tax Exemptions Work
Most states have enacted solar property tax exemptions. These laws instruct county assessors to exclude the value added by a qualifying solar system when calculating a home’s assessed value for tax purposes.
The practical effect is straightforward: your solar system may make your home worth more on the open market, but the tax assessor is legally required to ignore that added value when determining your tax bill. You get the benefit of higher home equity without paying more in taxes for it.
This policy exists because state legislatures recognized that property tax increases would discourage homeowners from going solar — undermining broader clean energy goals. The exemption removes that financial deterrent.
Solar Property Tax Exemptions by State
Solar property tax protections are widespread, particularly in the highest-volume solar markets. Below is a representative overview — always verify the current rules with your county assessor or a local installer, as policies can change.
| State | Exemption Type | Notes |
| California | Full exemption | Applies to new construction & retrofits |
| Texas | Full exemption | Statewide; no application required |
| Florida | Full exemption | Solar & other renewable systems covered |
| Arizona | Full exemption | Residential & commercial |
| New York | Full exemption | 15-year exemption for added value |
| Colorado | Full exemption | Renewable energy personal property exempt |
| New Jersey | Full exemption | Solar & wind systems covered |
| Massachusetts | Local option | Varies by municipality; check locally |
| Illinois | Full exemption | Applies to added value from solar |
| North Carolina | 80% exemption | Assessed at 20% of appraised value |
Note: States not listed above may still have partial exemptions, local-option policies, or pending legislation. Your county assessor’s office is the authoritative source for your specific situation.
When Solar Could Affect Your Property Taxes
While the exemption applies in most situations, there are a few edge cases worth knowing about.
Your State Doesn’t Have an Exemption
A small number of states have not enacted statewide solar property tax exemptions. In those states, a solar installation could theoretically increase your assessed value. This is uncommon but worth confirming before you sign a contract, especially if you’re in a state with a smaller solar market.
A County Assessment Error
Occasionally, a local assessor may incorrectly include solar equipment in a property valuation — especially in counties where solar is still relatively new. If your tax bill increases after a solar installation and your state has an exemption, this is likely an administrative error. Contact your county assessor’s office with your installation documentation and a reference to the applicable state statute. Most errors are resolved without much friction.
Simultaneous Major Renovations
If you install solar at the same time as other significant home improvements — a new addition, a major roof expansion, or a structural renovation — any reassessment will reflect all of the changes. The solar portion itself is typically still protected, but the other improvements may trigger a higher assessed value.
What About Leased Solar or a PPA?
If your system is financed through a solar lease or a Power Purchase Agreement (PPA), the equipment is legally owned by the solar company — not you. Because you don’t own the system, it generally isn’t counted as part of your property for assessment purposes.
That means property taxes almost certainly won’t change under a lease or PPA structure. However, it’s worth noting the trade-off: since you don’t own the system, you also don’t build equity in it, and it won’t contribute to your home’s resale value the way an owned system would. The property tax question essentially becomes moot, but so does the value-building benefit.
If you’re evaluating whether to buy or lease solar, property taxes are one consideration in a broader financial picture. A good local installer can walk you through both scenarios with numbers specific to your area.
Frequently Asked Questions
Frequently Asked Questions
It depends on your state. Some states apply the exemption automatically when a solar permit is filed. Others require a simple declaration or application submitted to your county assessor’s office. Your installer should be able to tell you what’s required in your area, and many handle the paperwork as part of the installation process.
Solar alone almost never triggers a reassessment. Most assessments are scheduled on a regular cycle, and an exempted improvement typically doesn’t reset that clock. However, if you pull permits for multiple simultaneous improvements, an assessor may evaluate the entire property at that time.
In most states, yes. Solar property tax exemptions typically transfer with the home. However, the new owner may need to file their own exemption documentation in some jurisdictions. This is a useful detail to clarify during a home sale and to include in your disclosure documents.
Yes. While solar is often exempt from property tax increases, it typically does increase the replacement value of your home for insurance purposes. You’ll want to notify your homeowner’s insurance provider after installation to ensure your system is properly covered.
Your county tax assessor’s office is the authoritative source. A qualified local solar installer should also be familiar with state and county exemption rules — it’s a question they field often. Your state’s energy office or department of revenue may also publish up-to-date exemption guidance.
Final Thoughts
For the vast majority of homeowners in the United States, solar panels will not increase property taxes. The combination of widespread state-level exemptions and clear legislative intent means that property tax concerns are rarely a meaningful barrier to going solar.
That said, the rules are local. Before you install, take five minutes to confirm your state and county are covered. Your installer should know the answer — and if they don’t, that’s a signal to ask more questions.
Ready to connect with a vetted local installer who knows your market? EnergyScout can help you find professionals who understand the incentives, rules, and opportunities specific to your area.